East Setauket, NY asked in Contracts, Business Law, Civil Litigation and Mergers & Acquisitions for New York

Q: (a) Can I use NY as venue for a suit? (b) What type of court should I file in? (c) What type of suit should I file?

I am a NY resident. I saw a FL convenience store for sale advertised on a website. I signed an LOI to buy the business via an asset sale. The sale would not include sale of any real estate. Both seller and I signed as individuals. I placed a good faith deposit of around $12k with an escrow agent, who is a FL attorney.

At the end of due diligence, I requested return of the good faith deposit because of findings. The seller feels he should get the deposit. The attorney will not release funds until there is consent between buyer and seller.

My ONLY questions are a, b, and c above.

The LOI does not entail the seller offering any consideration. The closest it gets to seller consideration is that it says that the buyer provided the seller with a list of due diligence items. For one of my arguments, I plan on saying that without seller consideration the LOI wasn't a valid agreement.

So this is not necessarily a breach of contract case.

3 Lawyer Answers

Jonathan R. Roth

Answered

A: Under the Letter of Intent does it state what states law and jurisdiction shall apply? if it says FL then you must file in FL. If it is silent, then the issue is do you fulfill the long-arm statute for NY. If you file in New York and the Court decides it does not have jurisdiction you will have to remove the case to FL. However, I would take the LOI and any emails to a local attorney for review and let him tell you if he thinks you can sue in NY or need to retain FL counsel.

Barry Eran Janay agrees with this answer

Ali Shahrestani, Esq.

PREMIUM
Answered
  • San Francisco, CA
  • Licensed in New York

A: NY may have jurisdiction, but have a lawyer review the contract and facts before you file a suit. More details are necessary to provide a professional analysis of your issue. The best first step is an Initial Consultation with an Attorney. You can read more about me, my credentials, awards, honors, testimonials, and media appearances/ publications on my law practice website, www.AEesq.com. I practice law in CA, NY, MA, and DC in the following areas of law: Business & Contracts, Criminal Defense, Divorce & Child Custody, and Education Law. This answer does not constitute legal advice; make any predictions, guarantees, or warranties; or create any Attorney-Client relationship.

Barry Eran Janay

Answered
  • Montclair, NJ
  • Licensed in New York

A: If it's silent the venue will most likely be proper where the seller (defendant) and the business you were buying is located... Like the other attorney said, if you file in NY you may risk having the case removed to FL if the seller objects and claims that NY is a forum non conveniens, it may still be worth a shot for you to try NY first.

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